Noble Francis’ Post

UK brick deliveries are a useful proxy for house building starts in the absence of monthly house building starts data. Deliveries in March 2024 rose for the 3rd consecutive month according to the Department for Business and Trade, but they only rose by 0.6% compared with persistent rain-affected February 2024 and remained 20.7% lower than the same month a year ago (Upper Chart). Deliveries in March were also 48.8% higher than in December 2023’s nadir, but note that this nadir was a very low base, at financial crisis levels, and they were still 39.3% lower than the 2018-2019 average, which was before the distortions of the temporary 'race for space' and stamp duty holiday, the removal of Help to Buy and the rise in interest and mortgage rates. Still, deliveries have risen for 3 consecutive months in December 2023, following on, after a lag, from the slight fall in mortgage rates from peak in August 2023 and the consequent rise in mortgage approvals and then property transactions so house builders have seen an improvement in housing sentiment since the turn of the year, albeit from a low base. The profile of brick deliveries is in line with major housebuilders' view on starts, which was that activity fell away sharply in 2023 H2 before recovering this year so far but with Q1 looking very bad compared with a relatively strong year ago. House building starts this year overall will critically be dependent on the housebuilder demand and sales in the key Spring selling season as well as mortgage rates, enabling demand, so it is still too early in the year to get a clear sign overall for the year. But, year-to-date (January-March), deliveries in 2024 were 11.3% lower than in 2023 and 39.5% lower than the 2022 peak, which was a somewhat artificial peak driven by the 'race for space' and low interest plus policy stimulus (Lower Chart). However, house building activity in 2024, especially house building starts activity, was affected by the persistent rain so Q2 may be boosted by a degree of catch-up work by house builders on larger sites although house builders on small sites are likely to just push back house building activity rather than catch-up due to a lack of spare capacity. Overall, whilst there has been a rise in brick deliveries and starts so far this year, large increases in brick deliveries and house building starts beyond seasonal activity are unlikely to be seen until mortgage rates fall significantly further and enable greater demand in 2024 H2 and, mainly, during 2025. #ukhousing #housing #ukhousingmarket #housingmarket #ukrealestate #realestate #ukconstruction #ukbuilders #construction #builders #constructionuk #buildersuk #building #ukbuilding #buildinguk #ukeconomy #constructionindustry #contractors #supplychain #constructionworkers #constructionworker #constructionwork #contractors #housebuilding #inflation #prices #buildingcontractors #growth #propertyprices #property #housing #housingmarket #housebuilding #housebuilders

The average asking price for a UK home has dropped by more than £5,000 this month as the autumn budget caused housing market jitters before the usual Christmas slowdown. Average asking prices from new sellers fell by £5,366, or 1.4%, in November to £366,592, compared with the 0.8% decline usually recorded at this time of year, according to the website Rightmove. Despite the drop, Rightmove’s experts struck an optimistic note as the housing market is busier than a year ago, with sentiment improved by interest rate cuts. The Bank of England cut the base rate this month for the second time this year, by another quarter point to 4.75%. However, despite the base rate cuts, mortgage costs have edged up in recent weeks owing to other external factors. Swap rates, the rates at which banks lend to each other, rose after the budget last month and the US presidential election, amid uncertainty about inflation and the global economy. Interest rates are still expected to decline but not as far or as fast as previously thought, with analysts pencilling in a reduction to about 3.5% by early 2026 rather than to 3%.

➡️ UK House Price inflation forecast – Savills 📈 Savills projects a 23.4% increase in UK house prices over the next five years, equating to an £84,000 rise. By 2029, the average property value is expected to reach £442,000, up from today’s £358,000. For the coming year, Savills anticipates a 4% rise, or approximately £14,500, in typical house prices. Lucian Cook, Savills’ Head of Residential Research, commented that recent reductions in mortgage rates have bolstered buyer confidence, driving moderate price growth in recent months. “Mortgage rate trends have heavily influenced buyer behaviour over the past two years. Lower monthly mortgage costs are now filtering through to increased confidence among prospective buyers, supporting a steady growth trajectory,” he said. “As affordability improves, this should drive house price growth in the coming years, though short-term volatility remains a possibility. The market is still sensitive to debt cost fluctuations, and changes in property taxation could prompt temporary disruptions.” The forecast is based on the "mainstream" housing market, particularly second-hand properties, as new-build prices may follow a different trajectory. The research involved data from Oxford Economics and Nationwide Building Society. According to Emily Williams, Savills’ Director of Research, some homeowners are likely to delay moving until mortgage rates stabilise, likely in 2027, allowing them to build up equity. “This could lead to a significant increase in activity among second-and third-time buyers in the latter part of our forecast period as pent-up demand from the high-interest period is released,” she noted. The volume of first-time buyers, however, is anticipated to remain below pre-pandemic levels, partly due to the lack of government schemes to replace Help to Buy. Williams also observed that increased regulation in the rental sector, alongside a higher second-home surcharge, is likely to dampen demand from both cash and mortgaged buy-to-let investors. Williams added, “Lower levels of remote working have driven a resurgence in commuter demand around major employment centres, which has strengthened London’s performance over the past year. We expect some residual effects of the ‘race for space’ to unwind by 2025, likely moderating growth in the South West and East of England compared to the capital. However, beyond 2025, affordability will be the primary determinant across all regions. Despite easing mortgage rates, buyers in London and the South East will still require larger deposits and higher borrowing, which will constrain growth in these areas.” Savills has provided regional projections for house price growth over the next five years. North West, 29.4% North East, 28.2% Yorkshire and the Humber, 28.2% West Midlands, 26.4% Scotland, 25.8% Wales, 25.2% East Midlands, 24.6% South West, 21.6% East of England, 19.9% South East, 17.6% London, 17.1%

House prices in the UK rose at their quickest annual rate in two years this November, according to Nationwide’s latest survey. The building society revealed a 3.7% increase in the price of a typical UK home compared to the same month in 2022, bringing property values close to record highs. The average home now costs £268,144, just shy of the £273,751 peak recorded in August 2022. Nationwide attributed the unexpected surge to a resilient housing market, with mortgage approvals nearing pre-pandemic levels. House prices also climbed 1.2% between October and November, marking the largest monthly increase since March 2022. Nationwide’s Chief Economist, Robert Gardner, pointed to low unemployment and pay rises outpacing inflation as key factors supporting the housing market. “Affordability remains stretched by historic standards, yet the market has proven resilient,” Gardner said. Recent data from the Bank of England highlighted that November’s mortgage approval numbers were the highest since August 2022. In October’s Budget, Chancellor Rachel Reeves announced that reduced stamp duty rates in England and Northern Ireland would end in April 2025. Currently, buyers pay stamp duty on properties over £250,000, but the threshold will revert to £125,000. First-time buyers, who currently avoid stamp duty on homes priced up to £425,000, will see this limit reduced to £300,000. Nationwide expects the impending changes to spark a surge in property transactions in early 2025, as buyers aim to secure deals before the deadline. This increase in activity will likely be followed by a slowdown. Looking ahead, Gardner predicted gradual market strengthening as consumer spending power improves, driven by lower interest rates and rising incomes. “While the stamp duty changes may influence short-term activity, broader economic conditions will play a more significant role in shaping the housing market’s trajectory,” he said. With property values holding steady near record highs, the UK housing market continues to defy expectations, despite ongoing affordability challenges.

UK brick deliveries are a useful proxy for house building starts in the absence of monthly starts data. Brick deliveries in July 2024 were 19.0% higher than in June and 9.6% higher than a year ago (Upper Chart), according to the Department for Business and Trade. After 2 monthly falls, a rise in deliveries and starts in July 2024 was expected as housing market sentiment and demand picked up following slight falls in mortgage rates since Spring and with post-election certainty. It is worth noting that house building dropped off sharply in 2023 H2, so the annual percentage changes in 2024 H2 will look very positive, especially in the final quarter of this year. However, deliveries in July were still 11.0% lower than in January 2020 and 17.0% lower than the average between 2018 and 2019, which was before the recent distortions to the housing market and house building. Monthly deliveries and starts are volatile, particularly compared with house building completions, but they highlight that the housing nadir was in 2023 Q4 and 2024 Q1, and it has been recovering from a low base since then. However, year-to-date (January-July) deliveries in 2024 were still 6.4% lower than in 2023 and 32.4% lower than at the recent peak of housing optimism in 2022, before the sharp rise in mortgage rates and the consequent fall in housing market demand. Given the nadir of housing market demand and house building starts was in 2023 Q4 & 2024 Q1, the year-to-date percentage change in 2024 is likely to continue to gradually improve towards the end of 2024 and into 2025, assuming mortgage rates fall slightly further and housing market sentiment and demand rise. A greater concern long-term is where demand will come from for even 2021/22 house building levels (never mind 1.5 million homes in 5 years) if the reliance is solely on private house building, given mortgage rates will not fall back to the historic lows they were at as recently as 2021 and there currently isn't government support to enable private demand such as Help to Buy. So, house price affordability may remain a long-term issue as price falls in the downturn were limited by a strong labour market and very few forced sellers and further rates of price growth may be limited. However, the Chancellor’s Autumn Budget in October may see a change in direct public investment in house building (additional finance or finance brought forward for social and/or so-called ‘affordable’ housing) and government policy stimulus for private housing demand, especially for first-time buyers. #ukhousing #housing #ukhousingmarket #housingmarket #ukrealestate #realestate #ukconstruction #ukbuilders #construction #builders #constructionuk #buildersuk #building #ukbuilding #buildinguk #constructionindustry #contractors #supplychain #constructionworkers #constructionworker #constructionwork #contractors #housebuilding #buildingcontractors #growth #propertyprices #property #housing #housingmarket #housebuilding #housebuilders

Looking to buy a house in the next 12 months? The outlook for property prices has changed. According to a reputable forecaster, it is anticipated that house prices will experience a period of stagnation throughout the current year. Initially, Capital Economics had projected a 2% increase in property prices, but now believes that a more likely scenario is a growth of 0.5%, as reported by The Times. This prediction is based on a decrease in buyer demand due to the escalating cost of living and a volatile mortgage market. Andrew Wishart, senior UK economist at Capital Economics, explains that this decline in demand coincides with a significant and sustained increase in housing supply, the most notable since 2013, excluding the period following the lifting of lockdown restrictions. Wishart further suggests that the market may soon face an excess supply situation, which could potentially lead to a decline in prices. Recent data from Halifax reveals a 0.1% drop in UK house prices between April and May, slightly lower than analysts' expectations of a 0.2% decrease. Conversely, Nationwide, a rival lender, reported an increase in its measure of house prices for May, following two consecutive months of decline. Halifax also states that prices rose by 1.5% in the 12 months leading up to May, surpassing the median forecast of a 1.2% annual increase in a Reuters news agency poll. Amanda Bryden, head of mortgages at Halifax, attributes the resilience in market activity during the spring months to robust nominal wage growth and a degree of improved confidence in the economic outlook. Bryden adds that the stable property price landscape over the past three months is likely to instill greater confidence among both buyers and sellers.

Driven by increased supply, the UK housing market is set to experience a positive shift this autumn, with heightened buyer and seller activity, and renewed confidence following the recent interest rate reduction. Nicky Stevenson, Managing Director of Fine & Country says: “Traditionally autumn brings renewed momentum to the housing market. The summer period typically sees a slowdown as many aspiring homeowners pause their search until after their holidays. As the seasons change, we usually observe an uptick in activity.” Stevenson highlights recent HM Revenue & Customs data, revealing that property transactions in September have averaged 12% higher than in August over the past five years. Rightmove figures further underscore this trend, showing a seasonal decline of 1.5% in the average asking prices in August, bringing the new average to £367,785. This decrease aligns with an 18-year pattern in new seller asking prices in August, followed by a recovery as the market enters the autumn months. Stevenson notes: “The supply of homes for sale now stands at a 7-year high, with an average of 33 homes per agent, giving buyers more choice. This increased supply is expected to keep house price inflation under control throughout 2024 and into 2025. Despite strong earnings growth, elevated mortgage rates mean that buyers remain price sensitive and modest levels of house price growth will help affordability rebalance further.” While the headline rate of inflation has seen a slight increase, reaching 2.2% in July, Stevenson believes the outlook remain stable. “Inflation might drift a little higher over the next few months but is expected to remain relatively close to the 2% target this year and next,” she comments. “With reduced inflationary pressure, many economists are predicting another rate cut for the year. According to a Reuters poll, 65% of economists forecast the rate to drop in November, leaving borrowing costs at 4.75%.” The recent interest rate cut has already positively impacted the market, with demand continuing to strengthen and mortgage approvals in July reaching their highest level in almost two years, up 26% year-on-year. Transaction levels have also steadily recovered, up 6.7% year-on-year in July. Stevenson adds that many major lenders have reduced their mortgage rates in response to the rate cut, with intermediary confidence in the mortgage industry’s outlook returning to its long-run norm. Read more in Property Reporter https://lnkd.in/eauMG7Nz Follow for more… Paul Zaad | Associate Director & Marketing Specialist | Stoke Newington and Highgate, London N16 Nw5 N19 N4 N6 E: paul.zaad@fineandcountry.com T: +44 (0)207 079 1523 M: +44 (0)7809 692 030 BOOK A VALUATION ⬇️ Link in the comments. #property #estateagent #house #hackney #stokenewington #finsburypark #paulzaad #realestate #fineandcountry #highgate

The latest Halifax index, released on Friday, showed residential property prices up to £292,505, a 4.3% year-on-year increase, marking the strongest growth since late 2022. Nicky Stevenson, Managing Director at Fine & Country said: “House prices gained momentum in August, setting the stage for a potential Autumn boost. “Property transactions in September are typically 12% higher than in August, a trend that looks likely to continue this year. Recent moves by the Bank of England to cut the base rate and predictions for another potential cut later in the year should further fuel market activity. “Inflation also remains close to the government’s 2% target — although it is expected to rise slightly — helping to boost buyer confidence in 2024. With lower mortgage rates and easing financial pressures, more buyers are pulling the trigger on their moving plans. Meanwhile, more first-time buyers are stepping into the market after many were previously priced out by high repayment costs. “While house prices are steadily rising, an increase in housing supply — up 14% year-on-year in August — should help control price inflation. The number of homes listed for sale is at a seven-year high, helping balance out rising demand. Possible tax increases in October’s budget may temper this momentum slightly, and affordability challenges continue to impact some buyers. Despite this, there is cautious optimism that the current strength of the property market will help it navigate these challenges and hopefully remain on a steady growth path.” Read more: https://lnkd.in/e-TfCJ3Q #fineandcountry #houseprices #property #halifax

Housing market 2024 – a summary 2024 was a significant year for the UK property market; Labour’s landslide general election win ended 14 years of Conservative rule in Britain, plus the Bank of England reduced interest rates in August after being held at 5.25% for a year. Here’s a roundup of the housing and mortgage markets at the end of 2024. Recovery in sales Buyer and seller confidence grew in 2024 with the promise of reduced interest rates. The end-of-year sales pipeline was the highest in four years*, with 283,000 sales expected to reach completion in the first half of 2025. In the first 11 months of 2024, estate agents agreed an average of 6.1 sales per month – the highest number since 2021. Despite this increase in sales, house price growth remained muted, with Amanda Bryden, Head of Mortgages at Halifax commenting that “many potential buyers and movers still face significant affordability challenges and buyer confidence may be tested against a changeable economic backdrop”. A buyer’s market 2024 was a buyer’s market and it is expected to remain that way in 2025. In the first half of 2024, there was some improvement in market conditions, with buyers more willing to pay over the asking price. But price sensitivity returned after the Autumn Budget and buyers are currently paying 3.6% below the property’s asking price. First-time buyer activity First-time buyers (FTBs) do not currently pay any Stamp Duty on properties worth up to £425,000, however this threshold hold will revert to £300,000 in April 2025. This policy change, confirmed in the Autumn Budget, has created urgency among FTBs, particularly those buying in regions where houses are more expensive. From April, only 8% of homes in London will be exempt from Stamp Duty for FTBs**, so FTB demand has understandably increased in the capital. Tim Bannister, Rightmove’s property expert, advised, “We may see some negotiation tactics play out, particularly on properties close to the £300,000 mark, as both buyers and sellers try to mitigate their higher costs through the price agreed.” Mortgage market The reduction in Bank Rate in August 2024 came as a welcome relief to borrowers, but affordability remains a challenge for many buyers – particularly for those with smaller deposits. In December 2024, the average fixed mortgage rate was 4.83% for five years and 5.08% for two years, and Rightmove predicts that rates could fall to around 4.0% in 2025. While this is an improvement on spikes of 5-6% in 2023, it would still be significantly higher than pre-pandemic levels. We’re here to help you make informed decisions about your property plans. Contact us to explore how the latest market trends affect your housing journey. Your home may be repossessed if you do not keep up repayments on your mortgage. * Zoopla, 2024 ** Rightmove, 2024

Housing market on the rise. Respondents to the RICS Residential Market Survey expect the market to continue gaining momentum in the coming months. The most recent data shows a positive shift in the UK housing market, fuelled by recent falls in mortgage interest rates. Buyer demand and sales activity are both increasing, with industry professionals expecting more growth as we enter the fourth quarter of the year. In August, the number of people looking to buy a home increased by 15%, up from 4% in July. Meanwhile, house prices are rising again, entering positive territory for the first time since October 2022, with a net balance of +1 and experts predicting a steady increase over the next three months. On the supply side, there was a modest increase in the number of new property listings (+7, up from +3 in July), and the volume of appraisals suggests that this trend will continue, increasing the options for new buyers. Rising house prices and increased supply will benefit sellers. Higher prices increase their potential profit, raising the value of their property. An increased supply of homes tends to attract more buyers to the market, resulting in a competitive environment. However, if supply rises too quickly, it may reduce competition, resulting in longer selling times or lower prices. A balanced market with modestly rising prices and consistent demand is ideal for sellers because it ensures profitability while keeping buyers interested. Current market conditions should benefit sellers, and there is a growing sense of optimism, with +45% of respondents expecting sales activity to increase over the next year.